An honest discussion is needed on Medicaid expansion

In his recent op-ed, ATRA President Kevin McCarthy called for a “healthy dose of intellectual honesty” in the debate over Gov. Jan Brewer’s plan to expand Arizona’s Medicaid program, otherwise known as AHCCCS, under Obamacare.

A good place to start would be to take an honest look at the ramifications of an expansion.

Far from a “relatively minor expansion” of 57,000 Arizonans, Brewer’s proposal could add as many as 450,000 people to AHCCCS. In addition to the expansion population, we will be adding those formerly eligible people who were frozen out in 2010.

Also of concern will be those new enrollees who were already eligible but had, for one reason or another, not yet signed up for the program. History tells us we can expect more of these people than expected to come out of the “woodwork” — after the Prop. 204 expansion in 2000, nearly double the estimated amount from this category were enrolled, costing the state of Arizona hundreds of millions of unanticipated money.

In addition to underestimating enrollment under the proposed expansion, it is also likely proponents have underestimated overall cost. The cost of the Prop. 204 expansion was overrunning projections by nearly four hundred percent by 2008 — again, costing Arizona hundreds of millions of dollars.

One of the principal arguments used by expansion proponents is that the cost of caring for the uninsured amounts to an additional $2,000 cost to your family’s insurance premium. However, in the seven years following the Medicaid expansion under Prop. 204, uncompensated care costs rose by an average of 9 percent annually — resulting in significantly higher insurance premiums for Arizona families.

Every Arizonan deserves to know why we should expect this expansion to be different.

A final concern is political.

Prop. 108, passed by voters in 1992, requires that any tax increase signed into law receive a two-thirds majority in the state Legislature. Expansion proponents insist that the provider “assessment” in the governor’s proposal doesn’t fall under that rule — but if they are allowed to fit a tax increase of hundreds of millions of dollars through a loophole, then the taxpayer protections of Prop. 108 would be rendered completely meaningless.

The simple truth is Arizona cannot afford to accept Governor Brewer’s expansion proposal. While proponents focus on assumed benefits in the first three years, they ignore the massive costs to the state of Arizona in the long term. The Kaiser Foundation projects costs to Arizona as much as $739 million from 2014-2019, due to significant increases in state Medicaid spending starting in 2017. If the state underestimates the cost of expansion — as it historically has — then any of the state’s share beyond what the provider tax brings will be borne completely by the general fund.

Moreover, the claim that AHCCCS is the nation’s most successful Medicaid program masks the fact that Arizona’s system is still dependent on a federal program which is hopelessly broken and delivers poor health outcomes.

Federal Medicaid spending is one of the major drivers of our massive budget deficits, and as that problem gets worse, it is inevitable that Washington will shift more and more of the burden for the program onto the states. In addition, study after study has shown that Medicaid patients have worse health outcomes than nearly every other group — sometimes even those without insurance at all.

The reason for this is poorer access to care.

Medicaid reimburses doctors at a significantly lower level than those with normal private insurance. Because they lose money on Medicaid patients, many doctors to not want to treat them — in Arizona, according to the Kaiser Foundation, that number is 23 percent. As Arizona doctors such as Jeff Singer and Sen. Kelli Ward have testified, this means patients often wait longer to get care, their health conditions worsen, and they seek treatment in emergency rooms (or, sometimes, they wait too long and there is little the doctor can do for them).

We cannot burden hardworking taxpayers with the cost of billions in new debt and what will be hundreds of millions in state spending to implement the expansion. And we certainly can’t put the most unfortunate among us at the mercy of a failing, bankrupt federal program from which we can expect little funding stability going forward.

To have an intellectually honest debate over this issue, we need to recognize there are many alternatives — both short-term and long-term — to expanding Medicaid under Obamacare. Those alternatives are beginning to be discussed and should be a part of a continued debate at the Arizona Legislature.

— Bill Fathauer is a state development officer with the Arizona chapter of Americans for Prosperity.

2 comments

You have got to be kidding. To summarize your points, it is better to have 450,000 fine Arizona residents continue to use the emergency room or worse, completely avoid seeking medical care and die, than to expand insurance coverage so that these people can get regular check ups and other preventable care? You are fine condemning these folks to death or untreatable illnesses rather than add on to the deficit? Really?

Your article is full of distortions. You provide no factual basis for your “the sky is falling” projections that our HC system will be totally overwhelmed by passage of the Governor’s Medicaid expansion proposal. Among other things, you neglect to disclose that the hundreds of thousands of Arizonans who were dropped from Medicaid in 2010 as an austerity measure will be included in the estimated 300-450,000 low income residents who will be brought on board via the expansion.

You also fail to acknowledge the many benefits that Medicaid expansion will provide for the people of Arizona. Among other things these include:

1. An infusion of 1.6 billion Medicaid dollars to Arizona, which will raise the federal matching from 2:1 to 9:1. Estimates by the non-partisan Grand Canyon Institute project that this funding will create an additional 21,000 jobs in our state – many of which will be in the high paying health care sector!
2. The legislation will protect safety net hospitals throughout the state from being pushed to the brink of bankruptcy by growing costs associated with uncompensated care.
3. The access to quality care which the expansion will afford to many additional low-income Arizonans offers potential to reduce our welfare roles through enabling many of these people to qualify for gainful employment, through correcting untreated medical conditions.
4. And most important of all, at no net cost to our state hundreds of thousands of needy Arizonans will have access to quality health care, dramatically improving their quality of life through saving thousands of lives in the process!

FINAL POINT: We must implore each and every member of our House of Representatives to focus their full attention on the many tangible benefits that passage of the Governor’s proposal will bring to our fellow Arizonans. We must follow our hearts and do the right thing for the people of Arizona!